Your Right to Know

The income gap between the top 1 percent of earners and everyone else is not as large in Ohio as
in some East Coast states, but a new report shows it’s getting wider everywhere.

The Economic Analysis and Research Network, a group that supports issues such as increased
investment in education and a higher minimum wage, found that the share of income held by the top 1
percent declined in 49 states between 1928 and 1979, but there has since been a sharp reversal.

“The rise in inequality … is not just a story of those in the financial sector in the greater
New York City metropolitan area reaping outsized rewards from speculation in financial markets,”
the report said.

In 2011, the report said the average income for the top 1 percent in Ohio was $699,693, compared
with $38,583 for the other 99 percent — an 18-to-1 ratio that ranks Ohio 29th in the nation.
Connecticut and New York have ratios above 40 to 1.

In 1979, the top 1 percent in Ohio earned 9 percent of income in the state, a figure that grew
to 15.9 percent in 2007.

That time period, the report said, runs between starts and ends of peak business cycles.

“To the degree we enjoy prosperity, it’s not being widely shared,” said Zach Schiller, research
director for the liberal Policy Matters Ohio. “In having a successful economy, ... you want large
numbers of people to be able to share in a growing economy.”

From 1979 to 2007, income growth in Ohio for the top 1 percent was 111 percent, compared with
11.3 percent for the bottom 99 percent. That means 49 percent of all income growth over that time
went to the top earners.

Meanwhile, in the wake of the Great Recession from 2009-11, the top 1 percent in Ohio saw income
growth of nearly 15 percent, seventh highest in the nation, while incomes for the other 99 percent
fell 0.4 percent.

“The point is not to say that the income at the top 1 percent grew four times as much as it
should have,” Schiller said. “The point is that the economy has grown and a very substantial number
of people aren’t benefiting.”

Greg Lawson, policy analyst for the conservative Buckeye Institute, said the study likely
overstates the issue because it does not take into account pensions, health benefits and other
nontaxable benefits.

“There is this obsessive focus on income inequality as opposed to discussion about making sure
we have the opportunity for people to move up the economic ladder,” he said.

The problem, he said, is Ohio overall has struggled with job growth, and too many people are
stuck in lower-end jobs.

“We need to look at tax policy problems and labor policy problems that hit at multiple levels of
government,” Lawson said. “We need to be looking at, as much as possible, deregulation and a
pro-growth tax code to get jobs created.”

Schiller sees the report as a reason to stop implementing state income-tax cuts that “will
further reduce by a greater amount what the top 1 percent is paying.”